Treasury's $16.8M Advertising Services Contract Awarded to True North Communications Inc

Contract Overview

Contract Amount: $16,866,426 ($16.9M)

Contractor: True North Communications Inc

Awarding Agency: Department of the Treasury

Start Date: 2007-01-01

End Date: 2008-01-31

Contract Duration: 395 days

Daily Burn Rate: $42.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ADVERTISING SERVICES

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10001

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.9 million to TRUE NORTH COMMUNICATIONS INC for work described as: ADVERTISING SERVICES Key points: 1. Contract value represents a significant investment in advertising services. 2. Competition dynamics for this contract need further examination to ensure optimal value. 3. Performance context is crucial to understand the effectiveness of these advertising services. 4. Sector positioning of True North Communications Inc. within the advertising industry is a key consideration. 5. Risk indicators associated with contract performance and vendor reliability should be monitored.

Value Assessment

Rating: fair

The contract value of $16.8 million for advertising services appears substantial. Benchmarking this against similar government advertising contracts is necessary to determine if the pricing is competitive. Without detailed performance metrics and comparison to industry standards for advertising campaigns, assessing the true value-for-money is challenging. The fixed-price nature suggests a defined scope, but the effectiveness of the delivered services will ultimately dictate the value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data indicates the contract was a 'COMPETITIVE DELIVERY ORDER,' suggesting some level of competition. However, the specifics of the competition, such as the number of bidders and the evaluation process, are not detailed. A competitive award is generally positive for price discovery, but the extent of competition influences whether the government secured the best possible terms and pricing.

Taxpayer Impact: A competitive award process, if robust, should lead to taxpayer savings by driving down costs. Understanding the breadth of competition is key to confirming this benefit.

Public Impact

The primary beneficiaries are likely government agencies requiring advertising services to communicate public information or promote programs. Services delivered include the creation and dissemination of advertising materials. The geographic impact is primarily within New York, where True North Communications Inc. is located. Workforce implications may involve jobs within the advertising and marketing sector, both at the contractor and potentially within the agency managing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition information raises concerns about potential missed savings.
Absence of performance metrics makes it difficult to assess the effectiveness and value of the services.
The duration and value of the contract warrant close monitoring for potential scope creep or cost overruns.

Positive Signals

Awarding to a competitive delivery order suggests an effort to leverage market competition.
The firm fixed-price contract type provides cost certainty for the government.
The contractor, True North Communications Inc., has secured a significant federal contract, indicating some level of established capability.

Sector Analysis

The advertising services sector is a dynamic market encompassing various media channels and creative strategies. Government spending in this area supports public outreach, awareness campaigns, and recruitment efforts. Comparable spending benchmarks would involve analyzing other federal contracts for similar advertising and marketing services across different agencies and contract types. The size of this contract suggests a substantial campaign or ongoing need.

Small Business Impact

The data indicates that small business participation (ss and sb fields) was not a primary focus or requirement for this specific contract. There is no explicit mention of small business set-asides or subcontracting goals. This suggests that the contract was likely awarded to a larger entity, and its impact on the small business ecosystem in the advertising sector would be indirect, potentially through opportunities if the prime contractor utilizes small business subcontractors.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Bureau of the Fiscal Service, the contracting agency, and potentially the Department of the Treasury's Inspector General. Accountability measures would be tied to the contract's performance clauses and deliverables. Transparency is enhanced through contract databases, but detailed operational oversight and performance reviews are internal agency functions.

Related Government Programs

Government Advertising Contracts
Marketing and Public Relations Services
Federal Communications Spending
Bureau of the Fiscal Service Contracts

Risk Flags

Lack of detailed competition metrics
Absence of performance outcome data
Potential for vendor performance issues
Unclear benchmarking against market rates

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.9 million to TRUE NORTH COMMUNICATIONS INC. ADVERTISING SERVICES

Who is the contractor on this award?

The obligated recipient is TRUE NORTH COMMUNICATIONS INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $16.9 million.

What is the period of performance?

Start: 2007-01-01. End: 2008-01-31.

What is the track record of True North Communications Inc. in performing federal contracts, particularly in advertising services?

Assessing the track record of True North Communications Inc. requires examining their past performance on federal contracts. This includes reviewing contract histories for on-time delivery, quality of services, adherence to budget, and any past performance issues or awards. Information from sources like the Federal Procurement Data System (FPDS) or CPARS (Contractor Performance Assessment Reporting System) would be crucial. A history of successful, high-quality service delivery would indicate reliability, while a pattern of issues might suggest higher risk for this current contract. Without specific past performance data for True North Communications Inc., it's difficult to definitively assess their suitability beyond what is implied by winning this award.

How does the $16.8 million contract value compare to similar advertising service contracts awarded by the federal government?

To benchmark the $16.8 million contract value, one would need to analyze the average and median contract values for 'Advertising Services' (PSC code R408 or similar) awarded by federal agencies over a comparable period. This analysis should consider contract duration, scope of services (e.g., media buys, creative development, campaign management), and the specific agency's needs. If this contract represents a significantly higher or lower value compared to similar procurements, it could indicate either an exceptional deal for the government or potentially an overpayment/underestimation of needs. Data from FPDS can provide a basis for such comparisons, looking at contracts with similar objectives and service levels.

What are the key risk indicators associated with this specific contract, given its value and duration?

Key risk indicators for this $16.8 million advertising services contract include the potential for scope creep if the initial requirements are not clearly defined, leading to cost overruns despite the firm fixed-price structure. Another risk is the contractor's ability to deliver effective advertising campaigns that meet the agency's objectives, impacting public perception or program success. Vendor performance risk, such as delays or quality issues, is also present. Given the competitive delivery order nature, there's a risk that the competition may not have been as robust as desired, potentially impacting price competitiveness. Monitoring contractor performance against defined metrics and ensuring clear communication channels are vital mitigation strategies.

What does the 'COMPETITIVE DELIVERY ORDER' designation imply about the procurement process and potential value for taxpayers?

A 'COMPETITIVE DELIVERY ORDER' implies that the contract was awarded through a process where multiple vendors were solicited and evaluated, suggesting a degree of competition. This is generally favorable for taxpayers as competition tends to drive down prices and improve service quality. However, the 'delivery order' aspect suggests it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle. The true level of competition depends on how many bids were received and the rigor of the evaluation. If competition was limited or perfunctory, the value for taxpayers might be less than optimal. Further details on the number of bidders and the evaluation criteria would provide a clearer picture.

How does this contract fit into the broader context of federal spending on advertising and public outreach?

This $16.8 million contract represents a specific allocation within the federal government's overall budget for advertising and public outreach. Federal agencies utilize advertising for a wide range of purposes, including public health campaigns (e.g., CDC), recruitment (e.g., military), and disseminating information about government programs and services. Analyzing this contract's value in relation to total federal advertising spending provides context on its significance. Trends in federal advertising expenditures, influenced by administration priorities and agency needs, can also shed light on why such a contract was awarded. This specific contract likely supports a particular initiative or ongoing communication need of the Bureau of the Fiscal Service or the Treasury Department.

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Interpublic Group of Companies Inc (UEI: 006985790)

Address: 150 E 42ND ST, NEW YORK, NY, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,866,426

Exercised Options: $16,866,426

Current Obligation: $16,866,426

Parent Contract

Parent Award PIID: GS23F0037K

IDV Type: FSS

Timeline